KUALA LUMPUR: HeveaBoard Bhd’s net profit dropped 55.8% to RM3.17 million in the third quarter ended Sept 30, 2018 (3QFY18) from RM7.17 million a year ago, on the back of lower contributions across all segments, namely particle board manufacturing, ready-to-assemble (RTA) manufacturing and fungi cultivation.

This resulted in a lower earnings per share of 0.57 sen for 3QFY18 compared with 1.33 sen for 3QFY17.

Quarterly revenue also fell 13.8% to RM101.71 million from RM118.01 million in 3QFY17.

Nevertheless, HeveaBoard declared a second interim dividend of 1.2 sen per share for the financial year ending Dec 31, 2018 (FY18), payable on Jan 7, 2019.

In a filing with Bursa Malaysia yesterday, the group said its particle board manufacturing segment saw a 63.56% drop in pre-tax profit in 3QFY18 mainly due to the soft particle board market sentiment caused by the trade war between the US and China, weakened the US dollar-ringgit exchange rate and the increase in the cost of raw materials.

RTA manufacturing segment’s pre-tax profit also fell by 97.26% year-on-year mainly due to the critical shortage of foreign workers during the period, which resulted in higher operational costs as optimum production capacity could not be achieved and firm orders not met. The fungi cultivation segment recorded a pre-tax loss of RM1.11 million on revenue of RM240,000, mainly due to the start-up cost and the commercial harvest had only commenced in June this year.

For the cumulative nine months (9MFY18), the group’s net profit plunged 80% to RM9.77 million from RM48.8 million a year ago, while revenue was down 21.6% to RM323.09 million from RM411.99 million in 9MFY17.

HeveaBoard said the global business environment is currently challenging due to additional particle board capacities coming on stream and the macroeconomic condition is also highly uncertain with the trade war prevailing between US and China.

“The board of directors is, however, of the opinion that with the particle board sector continuing to focus on developing higher value products, better managing cost and efficiencies, the group should be able to manage the challenges ahead.